Michael Cullen will be watching tomorrow's GDP figure closely to see what it says about the viability of his long-promised superannuation fund, National Finance spokesperson Bill English said today.

"A sluggish GDP growth figure for June will undermine the credibility of Labour's economic centrepiece, Dr Cullen's scheme to pre-fund superannuation.

"Dr Cullen's scheme depends on contributions of around 3% of GDP, every year for decades. This will come from Government surpluses, which in turn depend on consistently strong economic growth and rigorous control of expenditure.

"Expectations are that the New Zealand economy shrank by around $300 million in the three months to June compared with what was expected just three months ago - and the shrinkage could be up to $1 billion by Christmas. Some commentators are expecting another drop in the September quarter, risking a fiscal deficit this year.

"How can Dr Cullen credibly tell people not to worry about their retirement income when he can't guarantee a surplus this year, let alone in 30 or 40 years time?

"The Government has made no attempt to explain the full implications of its superannuation policy, which in this case is meant to last many decades.

"Dr Cullen's scheme is in danger of running off the tracks before he's even got it started," Mr English said.

Ends

Inquiries: Bill English 026 110 860

John Goulter 04 4719 719 025 232 4303

A printable formatted copy of this press release will be available on http://www.national.org.nz along with an archive of previous releases.

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